Pilgrim's Pride Shares Up
(AP) NEW YORK
Shares of Pilgrim's Pride Corp. rose Thursday as an analyst issued an upgrade, citing the poultry producer's declining stock price and strengthening chicken prices.
The sector has been facing pressure as fears of avian flu have cut demand, leading to a glut in supply. Last month, Pilgrim's Pride swung to a loss in the quarter ended July 1.
As of Wednesday's closing price, Pilgrim Pride's shares are down 29 percent for the year. BMO Capital Markets Corp. analyst Kenneth B. Zaslow said that price is near a bottom, as the company's "stock likely will follow the recent rebound in chicken margins."
He said things might be looking up in the sector, and praised poultry producers' reaction to tough times, which include lowering production.
"We remain encouraged by the chicken industry's rational behavior, as the majority (not all) of the top 10 chicken processors remain focused on returning to profitability," he noted.
Zaslow said he wouldn't be surprised if the particularly hot weather over the last month reduced production levels even further "as chickens do not tend to gain as much weight and have a greater fatality rate in hot weather."
He said chicken breast prices and whole-bird prices have strengthened, while feed costs have remained stable. Both points played a part in his upgrade.
"Recent production cuts, hot weather, a rebound in international demand, and better-than-expected crop conditions have contributed to the reversal of chicken cutout margins," he wrote.
Zaslow upped Pilgrim's Pride's rating to "Outperform," from "Market Perform." He noted risks that include the discovery of bird flu in the United States, a change in Russian chicken import quotas and an increase in feed costs.
Pilgrim's Pride shares rose $1.21, or 5.2 percent, to $24.69 during midday trading on the New York Stock Exchange. The stock has traded between $20.85 and $37.75 during the past 52 weeks.
In August, Pilgrim's Pride offered to acquire Gold Kist for about $1 billion, plus $144 million in assumption of debt. Gold Kist, the third largest poultry producer, said it wanted to remain a stand-alone company but would consider the offer. Gold Kist shares were recently up 3 cents to $20.11 in Nasdaq trading.
(AP) NEW YORK
Shares of Pilgrim's Pride Corp. rose Thursday as an analyst issued an upgrade, citing the poultry producer's declining stock price and strengthening chicken prices.
The sector has been facing pressure as fears of avian flu have cut demand, leading to a glut in supply. Last month, Pilgrim's Pride swung to a loss in the quarter ended July 1.
As of Wednesday's closing price, Pilgrim Pride's shares are down 29 percent for the year. BMO Capital Markets Corp. analyst Kenneth B. Zaslow said that price is near a bottom, as the company's "stock likely will follow the recent rebound in chicken margins."
He said things might be looking up in the sector, and praised poultry producers' reaction to tough times, which include lowering production.
"We remain encouraged by the chicken industry's rational behavior, as the majority (not all) of the top 10 chicken processors remain focused on returning to profitability," he noted.
Zaslow said he wouldn't be surprised if the particularly hot weather over the last month reduced production levels even further "as chickens do not tend to gain as much weight and have a greater fatality rate in hot weather."
He said chicken breast prices and whole-bird prices have strengthened, while feed costs have remained stable. Both points played a part in his upgrade.
"Recent production cuts, hot weather, a rebound in international demand, and better-than-expected crop conditions have contributed to the reversal of chicken cutout margins," he wrote.
Zaslow upped Pilgrim's Pride's rating to "Outperform," from "Market Perform." He noted risks that include the discovery of bird flu in the United States, a change in Russian chicken import quotas and an increase in feed costs.
Pilgrim's Pride shares rose $1.21, or 5.2 percent, to $24.69 during midday trading on the New York Stock Exchange. The stock has traded between $20.85 and $37.75 during the past 52 weeks.
In August, Pilgrim's Pride offered to acquire Gold Kist for about $1 billion, plus $144 million in assumption of debt. Gold Kist, the third largest poultry producer, said it wanted to remain a stand-alone company but would consider the offer. Gold Kist shares were recently up 3 cents to $20.11 in Nasdaq trading.